I know this isn’t a question that keeps you all awake at night but I thought it best to articulate the fact that there is a difference.
Firstly, a Finance Broker should be able to do everything that a mortgage broker can do. Same qualification requirements, same aggregator needs etc. However, it doesn’t necessarily work in reverse.
While both can find you a good home loan, a finance broker should be able to do the following as a minimum:
- Home Loans
- Commercial loans – for businesses
- Leasing
- Corporate loans
As well some finance brokers have the following capabilities:
- Structured finance
- Mezzanine debt
- SMSF loans
- Institutional loans
- Cross border transactions
Mortgage brokers will usually work through their bank assigned BDMs and for mortgages that works very well. We do the same (for mortgages). But what if your commercial client was in China and required a mandarin speaking banker? Also they required a banker to be able to assess cross border risk.
A finance broker will have connections within many banks and should know exactly where to go to ask the right questions. Can the transaction at hand be executed?
For example, my partner and I have a database of hundreds of bankers, private equity firms and mezz debt providers – we usually use a fraction of these but you never know when you will get a question that’s out of left field.
Does it assure you of getting your deal done? No. But it gives it a fighting chance.
So next time you’re in the market for a loan for your business make sure you talk with the right broker.